Trade and political relations between Russia and Nicaragua will be affected by the sanctions against Moscow, say experts consulted by voice of america.
Nicaragua reported a 208% growth this year in its exports to Russia, an increase that analysts see as “marginal” compared to exports to the US, which they believe will be affected by the relationship between Russia and Nicaragua.
Nicaraguan exports to Russia went from 6.2 to 13 million dollars in 2021, mainly thanks to a growth of 266.7% in terms of volume, which grew from 3.46 to 9.24 million kilos exported, he told the VOAGuillermo Jacoby, president of the Association of Producers and Exporters of Nicaragua (APEN).
The products that were sent the most to the Russian market were peanuts, with 8.6 million dollars, and coffee (4.2 million dollars), and to a lesser extent other products, such as textiles, tobacco, rum, pharmaceutical products , waste paper, cocoa, vinegar, plastics and scrap, among others.
Jacoby explained that, to date, despite the Russian invasion of Ukraine, economic transactions with Russia have not been affected.
“So far, everything is normal (…) The main products exported in 2021 were peanuts, with 8.6 million dollars, gold coffee, with 4.2 million dollars and then we are looking at textiles, 93,000 dollars” , quoted.
However, international analysts such as Benjamin Gedan, deputy director of the Latin American Program at the Wilson Center and professor at Johns Hopkins University in the US, estimate that this situation may change soon.
Mainly because Nicaragua, like other countries in Latin America such as Cuba and Venezuela, close to Russia, face sanctions, which soon Moscow will not be able to help them overcome as it has been up to now.
Gedan said in an interview with BBC World this week that governments that have shown greater closeness to Russia “will suffer greater consequences.”
“Cuba, Nicaragua and Venezuela depend on Russia to evade US sanctions, and those financial links are complicated by the sanctions that Washington has now imposed against Moscow,” Gedan explained.
A point with which Chase Harrison, of the Americas Society/Council of the Americas (AS/COA), agrees, who recognizes that the three nations are among the five countries in the world in which the US maintains broad-based sanctions, “ which means that almost all transactions are regulated in some way.”
USA, the main destination for Nicaraguan exports
The export sector sees how the government of President Daniel Ortega has made an effort to consolidate commercial ties with Russia, however, it remains to be seen how much longer that relationship can be sustained, especially since, according to Nicaraguan economists, the growth in trade and export is “marginal” and is not a market that can be compared to the United States.
Proof of this is that in the first two months of 2022 alone, it has paid more than 300 million dollars in exports to Nicaragua.
According to data from the Central Bank of Nicaragua (BCN), the United States was the main destination of Nicaraguan exports in 2021, with 1,591.8 million dollars.
Only at the end of 2021, Nicaragua reported a record figure for its merchandise exports of close to 3,600 million dollars, which implies a growth of more than 642 million dollars compared to the previous year.
The figure, according to reports issued by the Ministry of Finance and Public Credit and the Association of Producers and Exporters of Nicaragua, represents a 21.7% growth compared to 2020, when it reported 2,952 million dollars in exports.
Faced with these figures and taking into account other factors such as distance, the economist Marco Aurelio believes that the Russian market can be easily replaced.
“Russia, as a market, is substitutable for any other country with which political, economic and commercial relations are initiated. What is the cause of that? There are different theories regarding international economy and one of the factors that we cannot fail to mention is the distance factor. That is to say, Russia is not a great commercial partner of Nicaragua”, he concluded.
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